821.51/980: Telegram

The Minister in Colombia (Caffery) to the Secretary of State

83. My telegram No. 80, June 13 [11], 4 p.m. At the last minute after everything else was agreed on for advance of last [$]4,000,000 bankers today have made a new condition: they desire to jump interest rate on renewal of whole loan June 30 from 7 to 8 percent. Olaya rightly says that in the face of the approval of the Catatumbo contract yesterday it is impossible for him to face the country and admit that the interest rate asked by American bankers has been increased immediately upon approval of Catatumbo contract when the entire nation believes that its approval will bring about improved economic and financial conditions here. He says that later in the year he might be able to pay more but certainly not now.

I agree entirely. An increase of this interest rate would now have absolutely disastrous consequences for the whole current of friendly feeling now existing here for the United States. The bankers apparently still have absolutely no understanding of the situation here or their own best interests. They are frivolously reopening the whole question of Olaya’s continuing in office.